Link Between Washington’S Rail Network and Its Marine Terminal Assets
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Community Attributes Inc. tells data-rich stories about communities that are important to decision makers. President & CEO Chris Mefford Project Manager Spencer Cohen, PhD Analysts Madalina Calen Robert Douglas Maeve Edstrom Maureen McLennon Carrie Schaden Sean Volke Community Attributes Inc. 500 Union Street, Suite 200 Seattle, Washington 98101 www.communityattributes.com This page was intentionally left blank C ONTENTS Introduction .................................................................................................................... 1 Background and Purpose ............................................................................................. 1 Methods ....................................................................................................................... 1 Outline of Report ......................................................................................................... 2 Overview of Global Trade and Supply Chain Management ............................................. 3 Definition of Global Trade and Supply Chain Management Sector .............................. 3 Infrastructure Assets ................................................................................................... 6 Workforce System .......................................................................................................... 12 Origin and Destination Markets and Cargo Handling ................................................... 15 Direct Activities ............................................................................................................ 19 Jobs, Wages, Business Revenues ................................................................................ 19 Occupations in Other Industries and Total Sectoral Direct Impact ........................... 23 Economic Impacts of the Sector ..................................................................................... 25 Illustrative Companies .................................................................................................. 27 Transportation, Distribution, and Logistics (TDL) ..................................................... 27 Supply Chain Management in Other Industries ........................................................ 32 Supply Chain Services ............................................................................................... 32 Strategies for Supporting continued Growth in the Sector ............................................ 34 Summary and Conclusions ............................................................................................ 35 Appendix A. Interview List ........................................................................................... 36 Appendix B. Full List of Programs Offered in Washington State .................................. 37 Appendix C. Economic Impact Technical Appendix ....................................................... 41 I NTRODUCTION Background and Purpose Washington state is one of the most trade dependent states in the nation. According to U.S. Customs data, in 2017, more than $77.0 billion in merchandise and commodities originating in Washington were exported to overseas markets. These exports included not just airplanes, but also medical devices, agriculture commodities, machined parts, processed foods and many other Washington-made products. Washington’s ports, led by the Northwest Seaport Alliance and non-containerized operations at the ports of Seattle, Tacoma, Grays Harbor and Everett, and air cargo out of Sea-Tac International Airport are also key purveyors of trade between other parts of the U.S. and the world. These ports facilitated the movement of $80.2 billion in exports and more than $92.0 billion in imports in 2017, including products from or destined to domestic markets as far as the U.S. Midwest, making this region one of the most important centers for containerized, bulk and breakbulk shipments in the country. Behind these large trade flows exists an extensive network of service providers and logistics operations that comprise the Global Trade and Supply Chain Management sector. These include companies and organizations specializing in marine terminal operations, air freight shipments, supply chain management, freight forwarders, trade finance and trucking, as well as the ports, educational institutions and state and federal government agencies. In addition, there are many related operations and personnel within trade-reliant industries in Washington, such as global logistics and supply chain managers at The Boeing Company. This study evaluates the size, breadth, geographic diversity and economic impacts of this sector, including quantifying the number of jobs, income and business revenues in subsectors. This report concludes with a set of recommendations to the Center of Excellence for Global Trade & Supply Chain Management, grounded in this research, for supporting the Global Trade and Supply Chain Management sector going forward. Methods This analysis leverages multiple data sources, including employment data series published by the Washington State Employment Security Department (ESD) and U.S. Bureau of Labor Statistics, revenue data from the Washington State Department of Revenue (DOR), personal income and self- employment data from the U.S. Bureau of Economic Analysis and trade data from the U.S. Census Bureau. Estimates were then validated or adjusted based on interviews with industry representatives and auxiliary information CENTER OF EXCELLENCE FEBRUARY 2019 P A G E 1 SECTOR ANALYSIS and data sources. Economic impacts were calculated through use of the Washington State Input-Output (I-O) Model. Definitions Throughout this study, the Global Trade and Supply Chain Management sector is reported in two segments, defined as follows: • All-in activities. Firms and industries primarily engaged in global trade and supply chain management, or what will be referred to as “all-in” activities. • Other leading occupations. Additional jobs, wages, and revenues associated with workers engaged in global trade and supply chain management in other industries across the economy. Outline of Report The remainder of this report is organized as follows: • Overview of Global Trade and Supply Chain Management. A review of the sector definition and summary of key activities. • Workforce System. Educational institutions that support the sector. • Direct Activities. Key measures of the sector, including jobs, income, revenues and leading occupations. • Economic Impacts. Additional jobs, income and revenues supported through multiplier effects statewide. • Strategies for Supporting Continued Growth in the Sector. Key education issues identified by industry stakeholders. • Summary and Conclusions. Review of key findings. CENTER OF EXCELLENCE FEBRUARY 2019 P A G E 2 SECTOR ANALYSIS O VERVIEW OF G LO B A L T RAD E AN D S U PP LY CHAIN M ANAGEMENT Definition of Global Trade and Supply Chain Management Sector The Global Trade and Supply Chain Management sector includes a range of activities involved in facilitating the movement of goods between businesses, intermediate users and final consumers. Exhibits 1 and 2 below present a description and schematic rendering of the sector, taking into consideration businesses and activities central to the movement of goods (Transportation, Distribution, and Logistics), critical infrastructure, supporting services, other businesses in Washington engaged in procurement and supply chain management (e.g., procurement and compliance divisions within larger manufacturers) and educational institutions whose mission is to provide needed human capital to support these activities. Exhibit 1. Description of Segments of Sector Illustrative Companies Segment Subsector/Activity Description and Organizations Domestic and international freight Tote Maritime, Foss Marine cargo shipping vessels, e.g., Tote, as well as Maritime supporting operations such as tugs. Movement of cargo from one mode BNSF, UP, SSA Marine, Transloading & to another and consolidation and MacMillan-Piper, Oak intermodal repackaging of goods, including Harbor Freight Lines. between container sizes. Transportation, Air cargo jobs at Freight airlines (e.g., Air China) and Distribution & Alaska Airlines and Air cargo shipping air cargo ground-handling Logistics Delta, Hanjin Global operation. Logistics, Swissport. Freight arrangement and 3rd Party Expeditors Freight forwarding Logistics International Lineage Logistics and Dry and cold storage facilities and Warehousing & storage Radiant Global packaging. Logistics Couriers Express delivery services DHL, FedEx, UPS Procurement and supply Procurement, sales, import and Supply chain and chain management Supply Chain export of finished and/or procurement units across local Management intermediate goods and materials, within local manufacturers, customer service. manufacturers. wholesalers, shippers U.S. Bank, Bank of Letters of credit and other short-term Trade Finance America, Washington lending for exporters and importers. Trust ITAR and other regulatory Supply Chain Compliance Dorsey Whitney LLP compliance issues. Services Assistance with federal guidelines on Customs brokers BNSF Logistics, Lynden importing and exporting. Consulting/Market Research on market opportunities. Bryant Christie research CENTER OF EXCELLENCE FEBRUARY 2019 P A G E 3 SECTOR ANALYSIS Exhibit 2. Infographic of Global Trade & Supply Chain Management Sector CENTER OF EXCELLENCE FEBRUARY 2019 P A G E 4 SECTOR ANALYSIS Transportation,